Investment.
Our short- and medium-term targets of achieving increases in net sales and profit also depend on the success of our investments. For the next two fiscal years, we plan to invest at least as much as in fiscal 2006/2007, although, given the expansion of our operations, the figure is likely to be somewhat higher.

Financial and Asset Position.
Our aim for the next two fiscal years is to lower the ratio of working capital (Glossary)  to net sales. This decrease should also produce a further increase in operating cash flow (Glossary) .

Based on the projected net profit figures for 2007/2008 and 2008/2009, we expect to be able to keep the equity ratio at the level of fiscal 2006/2007.

Research and Development.
A key element of our growth strategy is the consolidation and expansion of our potential to innovate. With this in mind, we intend to maintain a high level of investment in research and development. Our aim is to increase investment in research and development in absolute terms during fiscal 2007/2008 and 2008/2009, and thus maintain an R&D ratio of around 4.5%.

We shall reinforce our team of R&D specialists by making a number of new appointments in specific areas.

Purchasing and Logistics.
In response to an anticipated and prolonged fall in sale prices within our segments, we shall work with our partners and suppliers to identify and implement appropriate compensatory measures, for example, through our ProImprove program, to boost productivity.

In order to reduce costs, we always aim to buy in greater volume. We continue to expand our international activities within the area of procurement by increasingly sourcing raw materials directly in the supplier’s country of origin. On the production side, we aim to make up for lower sale prices by making increased use of the potential offered by our global production network. By meshing our own processes more closely with those of our suppliers, we can also optimize our logistics to make further cost savings, while, at the same time, improving supply security.

Employees.
To reflect the growth of our business, we intend to increase the number of our employees worldwide, with a particular emphasis on pursuing further international expansion. In addition to making new sales appointments, we aim to boost our own service and production capacity. The main focus here will be on building up new resources to allow us to provide integration and implementation services as quickly as possible, especially in our growth regions.

In terms of numbers, we expect our global workforce to pass the 9,000 mark in fiscal 2007/2008, with further increases in 2008/2009. However, all such increases are dependent on the actual performance of our business and the resulting prospects.

Opportunities.
Assuming current trends in the global economy and our business segments continue, we expect to benefit in the more established and developed markets, such as Europe and North America, from ongoing investment by retail banks and retailers in hardware, software and services to enhance their competitiveness, and in IT-based changes to existing processes. With regard to our customers’ branch operations as a whole, the focus of their investment activity lies on creating a more customer-friendly environment by offering new services, improving efficiency in relation to processes and the operation of their infrastructures and standardization. These trends offer good prospects for new business.

In response to an increase in demand for high-end services, such as system integration, consulting, Managed Services (Glossary)  and Outsourcing (Glossary) , we intend to expand our operations in these areas, and are confident that we can exploit further potential for growth.

Our Product business is also set to benefit from investment in replacement systems. In most cases, these are accompanied by a technological upgrade. We aim to promote our activities in this area through further innovation and by expanding our global production network. At the same time, we intend to enhance our business with the sale of high-end systems to the banking and retail industries to meet increasing demand.

We hope to benefit from economic growth in the “emerging countries”, especially in the Asia/Pacific/Africa region, and in Latin America and Central and Eastern Europe. Increasing prosperity in these countries is leading to an expansion of branch networks and self-service products, a development that is driven by fast-growing local or regional banks and retailers as well as by international groups that are constantly extending their geographical boundaries. Moreover, increasingly intense competition between providers is creating a trend towards investment in process optimization as a means of reducing costs and appealing to customers by offering new services.

It is our intention to make smaller acquisitions as suitable opportunities arise, especially with a view to building up our own service as well as our integration and implementation resources, and, where appropriate, to add to our software portfolio.

Disclaimer. The statements made in the report on expected developments are based on current assumptions and assessments made by the Board of Directors of Wincor Nixdorf AG. They are not intended to be taken as guarantees that these expectations will prove to be correct. The future performance and actual results achieved by Wincor Nixdorf AG and its affiliated companies depend on a series of risks and uncertainties and may, therefore, vary considerably from the forecasts made. Many of these factors, such as the future of the economy and the actions of our competitors and other market players, are outside the control of Wincor Nixdorf and cannot be predicted with any degree of certainty. There are no plans to update the forecasts made in this section. Wincor Nixdorf does not accept any specific obligation in respect of the forecasts in this report.